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Holloway prison development loan from the Mayor of London may remain secret

Under loan conditions, works at the prison must start in 2022

14 May, 2019 — By Emily Finch

Sadiq Khan at the opening of a new LGBT homeless centre in May 

MAYOR of London Sadiq Khan has warned that the full conditions of the multimillion pound loan given to a housing association for the development of Holloway Prison may never be known to the public.

He announced earlier this year that he had provided the £42m loan from the Mayor’s Land Fund to Peabody on the basis that it would provide 600 “genuinely” affordable homes on the site in Parkhurst Road. This would be more than half of the 1,000 homes planned for the former women’s jail.

Peabody paid a total of £81.5m to buy the prison from the Ministry of Justice.

It announced total group assets of £6.3bn last year and will be working with luxury housing developer London Square to transform the prison.

At the launch of a new LGBT homelessness shelter in Clerkenwell on Friday, Mr Khan said the full conditions of the loan may not be revealed because of “commercial sensitivities”.

He said: “It affects our ability to negotiate loans with other people so we can work out a loan with you on certain terms. We don’t want to prejudice our ability to negotiate a loan with someone else. There are commercially sensitive reasons not to disclose.”

It was announced in March that Peabody will have to repay the loan in full to the Mayor’s office but the public have not been told how long the housing association has to repay the funds or whether they must pay interest.

One of the other conditions of the loan was that out of the 600 or so “genuinely” affordable homes, around 400 must be for “social rent” while the rest will be shared ownership or at London Living Rent prices.

Social rent levels are pegged to local incomes to keep rents more affordable while London Living Rent prices is an initiative by the Mayor of London which targets middle-income Londoners.

Under the conditions of the loan, works at the prison must also start in 2022 but it is not known how Peabody could be penalised for not starting then.

CORRECTION: The original article said Peabody had profits of £6.3 billion last year but this has been changed to total assets of £6.3 billion.

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